Municipalities are often searching for new, novel ways to generate revenue.
Lately, some municipalities have toyed with the idea of a lease tax. In Lake County’s village of Bannockburn, officials were considering a lease tax on storage rental units. This was proposed when a storage rental company sought to open a facility in town.
The North Shore – Barrington Association of REALTORS® (NSBAR) studied the issue and felt that this was another tax on real estate, albeit a narrow one. NSBAR raised several concerns to the Village, including that the tax would put Bannockburn storage unit operators at a competitive disadvantage and that commercial property owners already pay significant property taxes, often for less services in return.
However, one argument, reportedly, resonated most. NSBAR pointed out that the tax seemingly would only be imposed upon on traditional storage rental units but not other types of storage in consideration of rent. NSBAR wrote: “A plain reading of the proposed ordinance seems to indicate that the proposed tax would only be imposed on what one would consider a traditional storage unit facility. However, it is certainly not uncommon for persons or other entities to rent storage space in a number of locations that do not advertise themselves as a traditional self-storage facility.”
The Village ultimately abandoned the plan to adopt this very narrow real estate tax.
“Some commercial practitioners incorrectly think REALTOR® government affairs only advocates for residential interests. That’s just not true; the Illinois Association of REALTORS® and its local associations are looking out for us too,” stated Matthew M. Nagel, chairman of Metro Storage, LLC and a member of the Northern Illinois Commercial Association of REALTORS® (NICAR).